Analyst: Only Genuine Reform Can Get Spending Under Control

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WASHINGTON, MAY 17, 2004-It will take more than
restoring budget caps and "PAYGO" requirements to fix a federal
budgeting process that is almost hopelessly biased in favor of
ever-higher spending, says a new paper from The
Heritage Foundation.

The need for reform is plain, according to Brian Riedl, Heritage's
Grover M. Hermann fellow in federal budgetary affairs. Federal
spending now tops $20,000 per household for the first time since
World War II. Federal spending has leapt $455 billion in just three
years. Spending on entitlement programs such as Social Security and
Medicare has surpassed 11 percent of gross domestic product for the
first time ever and is set to keep climbing.

"This is no accident," Riedl says. "For one thing, there are no
limits on how much Congress and the president may spend. Two-thirds
of the budget is classified as 'uncontrollable' and therefore
excluded from the usual oversight. Congress and the president don't
even come together to agree on a budget framework until the end of
the process, when the government's on the verge of a shutdown. The
result: no ceiling on spending."

What's needed, Riedl says, is the type of budget reforms found in
the Family Budget Protection Act. His paper examines this
legislation closely and shows that it would:

Cap entitlement spending as well as discretionary spending.
Putting a lid only on discretionary spending would be a mistake,
Riedl says. Entitlements comprise two-thirds of all federal
spending, and their budgets are projected to nearly double over the
next decade.

Create a joint budget resolution. It makes no sense, Riedl
says, for Congress and the president to work separately on
something as critical as the federal budget and come together only
at the end of the process. Such an arrangement inevitably courts
dissension and "train wrecks."

Make it harder to override restrictions. Spending restrictions
currently mean little in the House of Representatives, where a
simple majority can vote to ignore them. To be effective, budget
restraints must be enforceable.

Set up a "rainy day" fund. States maintain emergency funds to
provide for disaster relief and other unforeseen needs. To keep
members from wringing even more money from specious "emergencies,"
Congress should do the same.

Strengthen presidential "rescission." Presidents can attempt to
cut wasteful spending from important legislation by requesting a
"rescission" bill to eliminate it. Congress, however, usually
ignores these requests. The Family Budget Protection Act would
force lawmakers to defend wasteful spending-or drop it.